Friday, November 20, 2015

Making choices at every day, and if we include mental choices, we make choices almost every minute.

I look around me, and saw many people struggling with life always putting an effort to put on a smile.

I saw their lack of confidence of themselves as a bedrock of their empathy towards others.

I thought to myself, many of these people are deprived of "choices"

I offer to drive my TA to school so that he can be in school earlier and we can prepare for the school function earlier.

When we meet for breakfast, he was trying to withdraw some money from The ATM and couldn't. I asked him what happened, he told me the ATM only dispense $100 notes.

How long ago when I dun even have $10 in my pockets. Now, although I am a "poor man" in the F bloggersphere, I do not really have a cash flow problem.

And how I had taken things for granted.

We have a choice and be glad we dun have a choice.

We have a choice to enjoy every minute now as it last.

We dun have a choice as we might all

Fall sick, lose our job or die.

Our way of life is a choice.

There is no better choice.

I am very unhappy at my work recently. I decide to forget my choices. I do have them.

Transfer after 3 years. Step down after 3 years. Go private... Etc.

I told myself to forget my choices now. I ask myself to accept that it is not something I like, but I will do what I could that I otherwise would not be able to if I am not in the current position. I also told myself to accept that my best is simply not enough but nonetheless I will continue to slog on.

My choice is to value add as my position allowed.

No choice is a happier choice for me.

Bad things happen. No choice. Good things happen, and we think we have a choice?

The choice is there in the mind, and the mind is as flickering as the cloud

Saturday, November 14, 2015

For every business, I want it to be FCF generating, profit resilent (no loss even during AFC or GFC) with clear growth drivers or cyclical on a potential upturn, last but not least a consistent dividend payout.

Thereafter, I would like to know its challenges and how it might be overcome.

1) ST engineering

Growth drivers are in smaller segment of revenue contribution. I correctly think the growth will come from electronic - LSG, but it is too small to offset weakness in aerospace.

It is not a real beneficiary of strong US dollar although it has a 20% contribution in revenue from US. Although there is no specific breakdown between segment and country, my guess is the US business is mainly Marine, Land Sysetm, which are both weak currently.

Venture on the other hand, should benefit form currency weakness of ringgit and strength of US.

2) accordia golf trust

Seasonality. Q2 is a seasonal weak quarter, I believed we should not annualise the weak Q2 neither should we do so with the stronger Q1.

Volality of weather is underestimated. Q1 has cancellation due to inclementweaker, but number is still solid, Q2 has weather problem too, but the numbers is horrible.

The biggest blind spot is the low margin for operating numbers during "ok"

Time is recipe for disproportional weak numbers for weaker time as I believe there is no significant buffer from the minimum fixed expenses.

As such, I am glad Lee metals exit its merchandise business, which is based on high volume and low margin

3) Cogent holdings

Growth drivers that are driven by debts. Cogent holdings reported a good set of Q3 results. Every year, cogent need to pay close to 8 mio to repay its debt. Which is still better than reits because it's loans are ammortized.

Ther is no details as of whether the debt interest is fixed or floating. The growth driver is the POSSIBLE development of logistic hub in jurong island. It's debt will properly balloon further and be a drag on short term earnings while it is being built

Sunday, November 8, 2015

I have Just finished reading the book, The Little Book Of Safe Money, by Jason Zweig.

What really intrigue me is the chapter on mind control, listing a series of unconscious biases that may hamper sound decision making. I was thinking through about it and realize I make several such mistakes/ tendencies. I wonder if there are others like me.

Anchors.

I always feel a stock is cheap after it break a new low from recent low. for example, when sembcorp Industries keep breaking new low, and then rebounded. That low then became an anchor and I might disregard other quantative research I might have done.

The same as ST engineering. I bought at a low of 3.24 a year ago. It then did rather well and stay above 3.4 for a considerable period of time. And when recently it went to 3.15 with pending CD of 5 cents, I jumped on it. With black Monday it went to 2.77. I made a bid at 2.65 but it was fat hope. Why is 3.15 cheap? Because I thought 3.24 is already cheap. But most importantly I think achor effect is at play here with the new low appearing after a long hiatus

The cure? Had a rough valuation and stick to it. I thought I will get CCT AT 1.2. I didn't move when it was 1.23. I was stupid.

The reverse of Anchor can work against one too. It raises so quickly and break a new high. It then dropped from that high. The next time it went back to that high one will be tempered to sell for no good reason except the fear of it falling again. That's how I let go of Venture when it gave me 2.5 years of dividends when all along my concept of taking profits is 3-4 years of advances of dividends.

Lesson: stick to target buy and sell price, and reason for changing it should not be due to achor effect

Framing

I dun really have this problem because I always look at the risk and what it entails and how much I could lose than the profits. Even the calculation of dividend gains is part of risk calculation for probability of eventual capital loss. So I dun get into the trap of looking and think a glass is half full, I will think it's half empty

Magnets in mind

I understand this as bias of familiarity. I dun buy household brand name for the sake of it. But I do only buy Singapore shares.

This seems countertuitive to circle of competence but actually it just mean we should keep expanding our radar.

Halo effect

I dun usually track "star CEO" although u do have some respect for Ren YuanLin, but I generally do not think "anyone can do no wrong"

But the halo effect manifest itself in my over-confidence on GLC to deliver. While I do not want to pretend that I know the industry better than them or I can be a better CEO on hindsight, all CEOS SHOULD BE judge by results and track records. Sembmarine foray into a Brazilian yard on hindsight is a mistake at the worst possible time. Compare this with Ren YuanLin steering of YZJ. If results is the only yard stick, Temasek should employ Yuan LOL

Also, Keppel is in a similar mess, but they merge the property business unit to offset some of the weakness and they didn't build a new yard in Singapore. I not sure what Sembmarine is doing to address all the problems.

Indirectly vested in Sembmarine through sembcorp industries

Prediction addiction

Thinking we are predict the short term movement of Market. I do not think I fall into this. Although I predict at least 2-3 years future earnings, and where are the sources of earnings.

The book asked us to write down our forecasts and track our success rate. The purpose is to show that it is futile.

I think my prediction on earnings of companies has a 50% success rate, not too bad I think. But I could be right about the earnings of a company but still wrong about its price ... Lol

Examples: Sembcorp industries, lee metals, venture etc etc...

The blind spot

We see ourselves too flattery or too kind to our mistakes. In the pure investment context, I see this everywhere. Value investors or self-proclaimed value investors poking at traders and traders poking at "long term" investors.

So to avoid this, avoid halo effect too. Show me the money. A trader who can consistently make money. Respect! A value investor who can consistently make money. Respect! A hybrid who can consistently make money. Respect!

Can I consistently make money? So Far in the last 2 years, think I am still happy with my performance but dun ask me my returns because I dun track it.

But I am quite sure I never peddle "my way" since I know my limits. Lol

Friday, November 6, 2015

It is important to look at results at QoQ angle rather than YoY angle. This is because Kemang is bought in Q4 2014.

Operating numbers wise, it is a job well done. The good numbers is somewhat offset by the weakening IDR

It's have a been 3 quarters since Kemang. It has proven to be a good buy, but since Alvin took over there is no more break down of occupancy by malls. So when overall occupancy falls from 2Q, it is hard to pinpoint is it due to the wretched Pulit Village and if Kemang occupancy is further improving.

But I expect interest cost to stay status quo or go down given Lippo is now rated, and the last loan was of the lowest interest rate.

So, LMIR should actually command better valuation, beside the stink reputation of doing a right when price start to recover.

So, am I adding? Nope. Although I did consider when it is nearer 30 cents

It has been more than 3 months since I last update my portfolio. During this window, black Monday occurs and with the Fed poised to raise rate in December due to strong employment numbers. Expext volality. I will just include the companies we had, no spreadsheet, in order of capital vested, if I remembered correctly. (^ Means owned by both accounts, * means by my wife account)